Iranian Rial Marks New Historical Collapse

The Iranian rial marked a new historic collapse against the US dollar on the black market on Saturday, dropping by nearly half in value as the economy comes under pressure from both the U.S. sanctions and COVID-19 pandemic.

According to the foreign exchange platform "Bonbast", the dollar was offered for 255,300 rials, up from 242,500 rials on Friday, while the economic daily "Donya-e-Eqtesad" set the price of the dollar at 252,300 rials compared to 241,300 rials yesterday.

Meantime, the official exchange rate, used mostly for imports of food and medicine subsidized by the state, registered 42,000 rials against the US currency.

The Iranian currency lost nearly 48% of its value this year, more than half the value last month, as lower oil prices and a global economic downturn exacerbated the country's economic crisis, which saw the highest death toll in the Middle East from the deadly virus.

Official media reported that President Hassan Rouhani, who partially blamed the rial’s decline on exporters’ failure to return their foreign exchange earnings, ordered the central bank on Friday to redouble its efforts to enforce rules to return export earnings.

In 2018, U.S. President Donald Trump withdrew his country from a multilateral deal aimed at controlling Iran's nuclear program, reimposing sanctions on the Iranian government that have hurt the economy since then.

In the months following, the riyal's value declined as Iranians rushed to purchase dollars for fear of Washington's withdrawal from the nuclear deal and sanctions that could reduce Iran's vital oil exports and severely affect the economy, and the currency managed to recover some of its losses in late 2018.